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ANEK [815]
3 years ago
7

A government experienced significant loss of certain roadways and bridges as a result of major flooding. Which of the following

estimation approaches would be most useful in estimating the amount of asset impairment that has occurred?a. Deflated depreciated replacement cost approach.b. Service units approach.c. Restorative cost approach.d. None of the above; each of these three approaches would be equally useful.
Business
1 answer:
Masja [62]3 years ago
7 0

Answer:

.c. Restorative cost approach

Explanation:

Service unit approach : This approach is meant mainly for service units , providing service to the society. When there is decline in no of service unit due to change in circumstances or technological obsolescence, or due to legal factors etc. this approach is made .

Deflated depreciated replacement cost approach:  This method is adopted when a capital goods or asset undergoes change in the manner it is used or when there is change in the duration of use.

Restoration cost approach : This approach is made when there is sudden loss in the value of an asset due to some unforeseen circumstances like flood , fire etc. The cost required to restore the asset is taken into account in this approach.

The present case belongs to this category.

You might be interested in
an annual bond selld for $865 with par value $1,000 and coupoin rate 8% what is bond yeild to maturity for 10 years
lisov135 [29]

Answer:

1.4484 %

Explanation:

The formula for Yield to Maturity =

[C + (FP - MP) /n]/FP + MP/2

Where

C = Coupon rate = 8% = 0.08

MP = Market value or price = $865

FP = Face or Par value = $1000

n = number of years = 10

Yield to Maturity =[ 0.08 +(1000 - 865) /10]/ 1000 + 865/2

Yield to Maturity = 1.4484 %

5 0
3 years ago
Which best describes how specialized producers decrease their opportunity costs?​
zavuch27 [327]

Answer: by limiting the types of goods produced

7 0
3 years ago
Payback period computation; even cash flows LO P1
uranmaximum [27]

Answer:

A. 2.2 years

B. 3.6 years

Explanation:

Payback period calculates the amount of the time it takes to recover the amount invested in a project from its cumulative cash flows.

Payback = amount invested / annual cash flows

Payback period is calculated using cash flows. So, the net income has to be changed to cash flows by adding back depreciation.

For the first machine

Straight line depreciation expense = (Cost of asset - salvage value) / number of years

( $520,000 - $10,000) / 6 = $85,000

Cash flow = $85,000 + $150,000 = $235,000

For the second machine, depreciation = ( $380,000 - $20,000) / 8 = $45,000

Cash flow = $45,000 + $60,000 = $105,000

Payback period for machine a = $520,000 / $235,000 = 2.2 years

Pay back period For machine b =

$380,000 / $105,000 = 3.6 years

I hope my answer helps you

3 0
3 years ago
One year ago, ABC Widgets, Inc., funded an expansion to its manufacturing facilities by issuing a 20-year first mortgage bond. T
MA_775_DIABLO [31]

Answer:

Current yield = 0.05238 or 5.238% rounded off to 5.24%

option B is the correct answer

Explanation:

The current yield is the return on investment in form of interest or dividend expressed as a percentage of the current market value of the instrument. Thus the formula for current yield on a bond will be,

Current yield = Interest per year / Current market price

Assuming that the value of bond is 100. The interest or coupon payment on bond will be = 100 * 5.5% = $5.5 per annum

Current yield = 5.5 / 105 = 0.05238 or 5.238% rounded off to 5.24%

5 0
3 years ago
A nursery has $40,000 of inventory in dogwood trees and red maple trees. the profit on a dogwood tree is 27% and the profit on a
Afina-wow [57]

Answer: The amount invested in the dogwood tree was $5000, while $35000 was invested in the red maple tree.

We arrive at the answer as follows:

Let the proportion of dogwood trees be x.

Then the proportion of red maple trees in the nursery will be 1-x, since there are only two types of trees in the nursery.

We use the following formula to find the proportion dogwood and maple trees in the nursery:

20 = 27x + 19(1-x)

Solving for x we get

20 = 27x + 19 - 19x

x = \frac{1}{8}

We can find the proportion of maple trees as follows:

1 - \frac{1}{8} = \frac{7}{8}

Since we have the proportions, we can easily find the amount invested in type of tree as follows:

Dogwood = 40000*\frac{1}{8} = 5000

Red Maple tree = 40000*\frac{7}{8} = 35000

5 0
3 years ago
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